Flexible or flimsy? Employment rights and the gig economy

The TUC’s recent report ‘Living on the Edge’ paints a gloomy picture of a marginalised workforce at risk of missing out on legal protection.

The TUC’s recent report ‘Living on the Edge’ paints a gloomy picture of a marginalised workforce at risk of missing out on legal protection.

The finger of blame is pointed in particular at low pay and weak employment rights in the ‘gig economy’. Yet the very nature of the report’s finding that some 3.2 million workers – one in ten – are in precarious jobs suggests that these people are no longer ‘on the edge’. Rather, the economy has shifted and what we used to call ‘atypical workers’ are anything but. These workers make up a substantial and distinctive part of the workforce as a whole, within a vibrant sector of the economy. New technology and evolving attitudes to work are asking questions about the appropriate scope of their employment rights, the answers to which need to come from Parliament rather than from the courts and tribunals, Consequently the findings of the Taylor review of how employment practices need to change in response to modern business models, which was commissioned by the Government last September, cannot come too soon.

Central to the debate is that in the gig economy workers wish to work ‘gigs’ rather than to engage in traditional less flexible working patterns. Neither worker nor employer is looking to be tied to anything beyond a loose relationship without commitment. The much discussed “floor of rights” seems neither necessary nor appropriate in this context. Trade unions are hostile towards an economic model that is far away from their traditional heartland. The decision of the Employment Tribunal in October in the GMB-backed Aslam, Farrar and others v Uber case may be seen as a victory by some, but one should not overlook the risk of such challenges causing serious damage to a vibrant area of the economy. Claims are reported to be flowing in to the Tribunals on the back of that case and unions can be seen to be on the attack against gig-economy employers in other areas. So far as the use of technology is concerned, what is sauce for the goose is sauce for the gander and apps have been used to coordinate wildcat strikes against Deliveroo. This is clearly going to be a battleground to watch in the months ahead.

Given the importance of mutuality in an employment relationship and the essentially ‘take it or leave it’ nature of work in the gig economy, the risk that such workers are employees is low. The issue is whether they fit within the legal definition of ‘workers’, the key to rights such as holiday pay and the minimum wage. Given that this concept was designed to deal with non-core workers, it is appropriate that attention is focused on whether those working in the gig economy fall within this category. The debate is lost on many of those involved, as the term “worker” is not well understood. One necessary element of that status is that the work is undertaken personally. Unfortunately for Uber, they were a soft target as they are bound to limit the use of their app to individual drivers to comply with regulatory requirements. In many other gig economy businesses, however, there will be no such requirement of personal service and consequently it will be all the harder to establish worker status – so the Uber decision should not be seen as of general application to the gig economy. Apart from anything else, there is every chance that the Uber decision will be overturned on appeal – so whilst this was a significant battle, we may have to dig in for a long war. Meanwhile, it is in the nature of gig economy businesses that they will be looking to flex their business models to steer away from the risks of such liabilities.

Michael Ryley (michael.ryley@weightmans.com) is a Partner in the Employment Pensions and Immigration team in London. If you have any questions please get in touch with Michael or speak to your usual Weightmans contact.

This article was first published in The HR Director on 11 January 2017.